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#1132289 - 02/19/09 01:21 PM Overdraft funds in ATM available Balance
complyyes Offline
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Midwest
Our e-banking unit would like to put the overdraft balance in the ATM available balance. I understand if we are not able to interrupt the transaction and provide the customer a notice that the transaction will overdraw their account that we are not following guidance. I also thought that 1/2010 we would be required with the final amendments to Reg. DD to disclose the amount of funds available for the consumer's immediate use or withdrawal without including additional funds to cover overdraft. The Overdraft software company says we can include the OD funds and be compliant. What is your bank doing?

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#1132401 - 02/19/09 03:33 PM Re: Overdraft funds in ATM available Balance complyyes
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#1136211 - 02/26/09 07:35 AM Re: Overdraft funds in ATM available Balance Andy_Z
John Burnett Offline
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Under the new rules, you must provide a balance at the ATM that represents only the customer's own funds in that account, and cannot include funds that might cover an overdraft from other customer accounts, an overdraft line of credit subject to Reg Z or a so-called overdraft privilege. You can provide a second balance that includes those other funds, if it's clearly labeled to indicate it includes those other funds. See the revised section 230.11(c) at http://www.bankersonline.com/regs/230/230-11_new.html.
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#1137217 - 02/27/09 02:51 PM Re: Overdraft funds in ATM available Balance John Burnett
Trees Offline
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Its Friday and I'm confused. Are we now supposed to be providing both balances at an ATM, i.e. 'actual" and using an overdraft line to kick in? We do not offer a OD Program. We use the old school OD lines of credit, where available.

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#1137246 - 02/27/09 03:14 PM Re: Overdraft funds in ATM available Balance Trees
StevenD Offline
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You can provide only one balance.

But if you only provide one balance it must represent ONLY the customer's checking account funds.

If you provide a second balance you must explain that the funds come from other sources and, if applicable, may not be available to cover all types of transactions.

Rule:
230.11(c) Disclosure of account balances. If an institution discloses balance information to a consumer through an automated system, the balance may not include additional amounts that the institution may provide to cover an item when there are insufficient or unavailable funds in the consumer’s account, whether under a service provided in its discretion, a service subject to the Board’s Regulation Z (12 CFR part 226), or a service to transfer funds from another account of the consumer. The institution may, at its option, disclose additional account balances that include such additional amounts, if the institution prominently states that any such balance includes such additional amounts and, if applicable, that additional amounts are not available for all transactions.

OFFICIAL STAFF COMMENTARY

(c) Disclosure of account balances

1. Balance that does not include additional amounts. For purposes of the balance disclosure requirement in section 230.11(c), if an institution discloses balance information to a consumer through an automated system, it must disclose a balance that excludes any funds that the institution may provide to cover an overdraft pursuant to a discretionary overdraft service, that will be paid by the institution under a service subject to the Board’s Regulation Z (12 CFR part 226), or that will be transferred from another account held individually or jointly by a consumer. The balance may, but need not, include funds that are deposited in the consumer’s account, such as from a check, that are not yet made available for withdrawal in accordance with the funds availability rules under the Board’s Regulation CC (12 CFR part 229). In addition, the balance may, but need not, include funds that are held by the institution to satisfy a prior obligation of the consumer (for example, to cover a hold for an ATM or debit card transaction that has been authorized but for which the bank has not settled).

2. Additional balance. The institution may disclose additional balances supplemented by funds that may be provided by the institution to cover an overdraft, whether pursuant to a discretionary overdraft service, a service subject to the Board’s Regulation Z (12 CFR part 226), or a service that transfers funds from another account held individually or jointly by the consumer, so long as the institution prominently states that any additional balance includes these additional overdraft amounts. The institution may not simply state, for instance, that the second balance is the consumer’s “available balance,” or contains “available funds.” Rather, the institution should provide enough information to convey that the second balance includes these amounts. For example, the institution may state that the balance includes “overdraft funds.” Where a consumer has opted out of the institution’s discretionary overdraft service, any additional balance disclosed should not include funds institutions provide under that service. Where a consumer has opted out of the institution’s discretionary overdraft service for some, but not all transactions (e.g., the consumer has opted out overdraft services for ATM and debit card transactions), an institution that includes funds from its discretionary overdraft service in the balance should convey that the overdraft funds are not available for all transactions. For example, the institution could state that overdraft funds are not available for ATM and debit card transactions.

3. Automated systems. The balance disclosure requirement in section 230.11(c) applies to any automated system through which the consumer requests a balance, including, but not limited to, a telephone response system, the institution’s Internet site, or an ATM. The requirement applies whether the institution discloses a balance through an ATM owned or operated by the institution or through an ATM not owned or operated by the institution (including an ATM operated by a non-depository institution). If the balance is obtained at an ATM, the requirement also applies whether the balance is disclosed on the ATM screen or on a paper receipt.
Last edited by StevenD; 02/27/09 03:16 PM.
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#1137514 - 02/27/09 05:57 PM Re: Overdraft funds in ATM available Balance complyyes
comptrainer Offline
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I'm sorry...but HOW does this help the customer? If I'm travelling, I may want access to all my funds at the ATM. If I'm shopping with my debit card, I may NEED access to all available overdraft funding sources. Does anyone know WHY this change is being made? If you come to my teller window and cash a check that exceeds the balance in your checking account, do I need to notify you if you are drawing from your OD protection or funding account?

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#1137521 - 02/27/09 06:03 PM Re: Overdraft funds in ATM available Balance StevenD
Jerseygirl Offline
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If we choose not to disclose "additional balances" are we able to still allow the customer to "overdraw" the account by the amount of our discretionary overdraft service.

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#1138167 - 03/02/09 02:31 PM Re: Overdraft funds in ATM available Balance Jerseygirl
John Burnett Offline
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The disclosure rules do not limit your ability to continue to allow ATM or POS transactions that would ovedraw the account. Thus, the option to include a second balance at the ATM or online that gives the padded balance, but clearly indicates that it includes other funds. Note that this requirement applies whether those other funds would come from the bank (payment of an overdraft), from the customer's OD line of credit or from the customer's other deposit funds.

Comptrainer: How does it help the customer? Based on the comments received by the Fed customers are more concerned about paying overdraft fees when they don't expect them than about not being able to access an OD line at the ATM. Take that with a grain of salt, if you have to. Just understand that the people who were more apt to respond to the Fed's request for comment would have been those with an axe to grind.
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#1138181 - 03/02/09 02:50 PM Re: Overdraft funds in ATM available Balance John Burnett
complyyes Offline
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Midwest
Our ATM network provider cannot handle two balance files. Reading Commentary c 3 - until they can handle the two files and insure that the non-proprietary ATM will display both balances and clearly mark the OD balance, we cannot add the OD amount to the balance files we send. The OD software company finally agreed that we would not be compliant with a sign at only our ATMs and that for now that balance cannot be added.

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#1138189 - 03/02/09 02:56 PM Re: Overdraft funds in ATM available Balance complyyes
CSB98 Offline
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Complyyes . . . I don't believe the rule applies to non-proprietary ATMS, only ATMs that you own. Someone correct me if I'm wrong.

Also, who is your ATM network provider? At one point ours told us that they didn't have anything they could add to the ATM screen, and then come to find out that there was something available.

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#1138453 - 03/02/09 07:14 PM Re: Overdraft funds in ATM available Balance CSB98
StevenD Offline
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From Item #3 in the Official Staff Commentary

3. . . . The requirement applies whether the institution discloses a balance through an ATM owned or operated by the institution or through an ATM not owned or operated by the institution (including an ATM operated by a non-depository institution). If the balance is obtained at an ATM, the requirement also applies whether the balance is disclosed on the ATM screen or on a paper receipt.
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#1139004 - 03/03/09 05:22 PM Re: Overdraft funds in ATM available Balance StevenD
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OK, one more time, from the top. The drop dead date for the new requirement to include both balances is 1/2010...right? Now, nothing has changed if you are offering the old style means of covering, i.e. no advertised Program.

there is no distinction being made as to whether you add/cover a potential overdraft via an OD Program or through the old means, i.e. an OD line of credit....If you add money, you need to include a provision on the ATM screen that will allow customer to opt out of continuing the transaction.....right?

No matter where the customer is accessing their account, your ATM or one in the Ukraine, you will need to have the ATM show the option to continue....right? Thanks

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#1139527 - 03/04/09 02:46 PM Re: Overdraft funds in ATM available Balance Trees
John Burnett Offline
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There is nothing in the Regulation DD rule that requires the addition of a "last chance to bail out" screen (similar to the one for imposition of ATM fees by the ATM owner or network). The 2005 Guidance documents include as a best practice, the following:
Quote:
• Alert consumers before a transaction triggers any fees. When consumers attempt to withdraw or transfer funds made available through an overdraft protection program, provide a specific consumer notice, where feasible, that completing the withdrawal may trigger the overdraft fees (for example, it presently may be feasible at a branch teller window). This notice should be presented in a manner that permits consumers to cancel the attempted withdrawal or transfer after receiving the notice. If this is not feasible, then post notices (e.g., on proprietary ATMs) explaining that transactions may be approved that overdraw the account and fees may be incurred. Institutions should consider making access to the overdraft protection program unavailable through means other than check transactions, if feasible.
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#1139536 - 03/04/09 02:50 PM Re: Overdraft funds in ATM available Balance John Burnett
John Burnett Offline
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Also, there is no requirement that you include two balances at the ATM. The requirement in Regulation DD, section 205.11(c) will be that you must display an "unpadded" balance (my term). You will be permitted to add a second balance that includes other funds from a courtesy overdraft program, a transfer from an OD line of credit, or a transfer from another account of the customer's, but you must prominently state that the balance includes such other funds.
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#1139541 - 03/04/09 02:51 PM Re: Overdraft funds in ATM available Balance John Burnett
John Burnett Offline
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Quite candidly, the regulators would be happiest if the only balance available at the ATM or VRU or website, etc., is the actual balance. They clearly prefer that a padded balance not be displayed at all.
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#1139550 - 03/04/09 02:56 PM Re: Overdraft funds in ATM available Balance StevenD
CSB98 Offline
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Originally Posted By: StevenD
From Item #3 in the Official Staff Commentary

3. . . . The requirement applies whether the institution discloses a balance through an ATM owned or operated by the institution or through an ATM not owned or operated by the institution (including an ATM operated by a non-depository institution). If the balance is obtained at an ATM, the requirement also applies whether the balance is disclosed on the ATM screen or on a paper receipt.


I do not know much about how ATM networks operate, but how we supposed to follow this requirement on non-owned ATMs? If one of customers uses the ATM down the street that is not owned by us, how to we ensure that they are getting the proper disclosures?

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#1139612 - 03/04/09 03:38 PM Re: Overdraft funds in ATM available Balance CSB98
StevenD Offline
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KY
Good question. I think the ATM networks will have to establish some new standard transaction sets to include two balances.
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#1139615 - 03/04/09 03:39 PM Re: Overdraft funds in ATM available Balance CSB98
John Burnett Offline
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Your institution controls the balance or balances displayed on the screen. There appear to be only two ways you can be certain that a network ATM doesn't incorrectly disclose the second (optional) balance. The first is to not send the "padded" balance to the network at all. The second is for networks to establish an absolute standard on how the padded balance, if sent, is displayed.
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#1139767 - 03/04/09 05:12 PM Re: Overdraft funds in ATM available Balance John Burnett
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So, John, after 1/2010 if we add money drawn from an ODL in order to complete at ATM withdrawal request, we will have to include some notice to the effect that we are doing so....or can we say something to the effect: if you are withdrawing money and if you do not have sufficient funds in your account, we will draw on your ODL to cover the shortage.... This could be a standard notice on the side of our ATMs...or do we have to mess around with having the actual screen say this?

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#1140899 - 03/05/09 08:13 PM Re: Overdraft funds in ATM available Balance Trees
John Burnett Offline
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The change that is effective 1/1/2010 has nothing to do with what you tell your customer if he or she is about to dig into OD territory. The only change with regard to ATMs and overdrafts affected which balance you deliver at the ATM. There is no requirement within Reg DD that you include a notice when you're advancing funds to cover an OD.

The ATM overdraft notice thing is from the "Best Practices" Guidance issued back in 2005, which I quoted above in post 1139527.
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#1141198 - 03/06/09 02:18 PM Re: Overdraft funds in ATM available Balance John Burnett
Trees Offline
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Thank you. I hate this and I'm going to buy a lottery ticket tonight.....and buy some property on the Cape.

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#1142529 - 03/09/09 10:33 PM Re: Overdraft funds in ATM available Balance Trees
John Burnett Offline
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Come on down!
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#1143236 - 03/11/09 12:42 AM Re: Overdraft funds in ATM available Balance CSB98
complyyes Offline
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Star Network is our ATM provider

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